The Taxation Laws Amendment Bill, 2016 (TLAB) was published on 2 December 2016. The TLAB, which includes the changes by the Standing Committee on Finance (SCOF), differs from the draft TLAB, in particular in respect of the clauses affecting changes to the ETI.
The proposed amendments affecting the ETI follows hereunder:
1.Extension: The ETI will continue until 28 February 2019. Private sector employers that are tax compliant, and that hire employees earning below R6000 per month, aged 18 to 29 should investigate whether they can benefit from the incentive.
2.Caps: The proposal to impose an annual cap of R20 million in ETI claims per annum, per employer, was removed. SARS and the National Treasury will continue to monitor the affordability of the ETI, and may review the imposition of a cap in future should cost-containment be required.
3.Number of hours worked: Clarification is provided, effective from 1 March 2017, that unpaid leave (and similar) does not count towards the 160 hours. It is expected that payrolls will be amended to take the amendment into account. Employers projecting ETI claims should ensure that the effect of the amendment is included in their projections.
4.Limitations on roll-overs and back-dated claims: As from 1 March 2017, monthly claims can only be made up to the date of each 6-monthly reconciliation. After that no further claims for that reconciliation period will be allowed. At that time any excess becomes available as a refund.
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Update: Employment Tax Incentive (ETI)
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